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KENTUCKY FRIED CHICKEN(KFC)

INTRODUCTION KFC Corporation, based in Louisville, Kentucky, is the worlds most popular chicken restaurant chain, specializing in Original Recipe , Extra Crispy TM, and Colonels Crispy Strips chicken with home style sides and five new freshly made sandwiches. Every day, nearly eight million customers are served around the world. KFCs menu everywhere includes Original Recipe chickenmade with the same great taste Colonel Harland Sanders created more than a half-century ago. Customers around the globe also enjoy more than 300 other products from a Chunky Chicken Pot Pie in the United States to a salmon sandwich in Japan. KFC continues reaching out to customers with home delivery in more than 300 restaurants in the United States and several other countries. And in quite a few U.S. cities, KFC is teaming up with other restaurants, Taco Bell and Pizza Hut, selling nearly fifty years ago; Colonel Sanders invented what is now called home meal replacement selling complete meals to harried, time-strapped families. He called it, Sunday Dinner, Seven Days a Week.Today, the Colonels spirit and heritage are reflected in KFCs brand identity the logo features Colonel Harland Sanders, one of the bestrecognized icons in the world.

Mission statement : To be the leader in western style restaurants through friendly service , good quality food and clean atmosphere.

Goals of KFC :Build an organization dedicated to excellence. Consistently deliver superior quality and value

in our

products and services. Maintain a commitment to innovation for continuous improvement and grow, striving always to be the leader in the market place changes. Generate consistently superior financial returns and benefits our owner and employees.

Company overview:
Colonel Harland sanders, born September 9, 1890, actively began franchising his chicken business at the age of 65. Now, the Kentucky fried chicken business he started has grown to be one of the largest retail food service systems in the world. And colonel sanders, a quick service restaurant pioneer, have become a symbol of entrepreneurial spirit. More than two billion of the colonels finger lickin good chicken dinners are served annually. And not just in America. The colonels cooking is available in more then 82 countries around the world. When the colonel was six, his father died. His mother was forced to go to work, and young Harland had to take care of his three year old brother and baby sister. This meant doing much of the family cooking. By the age of seven, he was a master of a score of regional dishes. Ate age 10, his first job working on a nearby farm for $2 a month. When he was 12, his mother remarried and he left his home near Henryville, Ind., for a job on a farm in Greenwood, Ind. He held a series of jobs over the next few years, first as a 15-year-old streetcar conductor in New Albany, Ind., and then as a 16-year old private, soldiering for six months in Cuba. After that he was a railroad fireman, studied law by correspondence, practiced in justice of the peace court, sold insurance, operated an Ohio River steamboat ferry, sold tires, and Operated service station. When he was 40, the colonel began cooking for hungry travelers who stopped at his service station in Corbin, KY. He didnt have a restaurant then, but served folks on his own dining table in the living quarters of his service station. As more people started coming just for food,he moved across the street to a motel and restaurant that seated 142 people. Over the next nine year, he perfected his secret blend of 11 herbs and spices and the basic cooking technique that is still used today.
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KFC India
KFC is the worlds No.1 Chicken QSR and has industry leading stature across many countries like UK, Australia, South Africa, China,USA, Malaysia and many more. KFC is the largest brand of Yum Restaurants, a company that owns other leading brands like Pizza Hut, Taco Bell, A&W and LongJohn Silver. Renowned worldwide for its finger licking good food, KFC offers its signature products in India too! KFC has introduced many offerings for its growing customer base in India while staying rooted in the taste legacy of Colonel Harland Sanders secret recipe. Its signature dishes include the crispy outside, juicy inside Hot and Crispy Chicken, flavorful and juicy Original Recipe chicken, the spicy, juicy & crunchy Zinger Burger, Toasted Twister, Chicken Bucket and a host of beverages and desserts. For the vegetarians in India, KFC also has great tasting vegetarian offerings that include the Veggie Burger, Veggie Snacker and Veg Rice meals. In India, KFC is growing rapidly and today has presence in 11 cities with close to 50 restaurants.

Values of KFC
Focus all our resources to our restaurants operation because that is where we serve our customers. Reward and respect the contributions of each individual at KFC. Expand and update training with time and be the best we can be and more. Be open, honest and direct in our dealings with one and other. Commit ourselves to the highest standard to the personal and professional integrity at all times. Encourage new and innovative ideas because these are the key to our competitive growth. Reward result and not simple efforts. Dedicate ourselves to continuous growth in sales, profit and size of organization. Work as a team.

Market Coverage Strategy


KFC will be using differentiated market coverage strategy. It means that different marketing mix will be used for different age groups.

TARGET MARKET FOR FAST FOOD


After evaluation of various segments, KFC has decided to target the market of Urban and Sub-urban Areas of India.

Product usage: People are educated and they want variety in their diet. Normally people of rural areas dont take fast food. On the other hand people of urban areas take fast food. Income of the people of urban areas is normally high and they can afford to purchase such products, which are slightly higher in price as compared to prevailing prices of local food in the market. People of Urban Areas are more quality conscious than the people of Rural Areas. In Urban Area there lived people from every walk of life and profit generation is easier than in Rural Areas. Population density is higher in Urban Areas as compared to Rural Areas, so the number of customers are more in Urban Areas

Competitive analysis
Competitors:You cannot enjoy the business without competitors. No organization can afford to ignore there competitors. It is very important for a marketing managers to monitor the activities of there competitors, what they are doing? KFC adopted such sort of strategy that there is no competitor for spicy chicken, which is made by KFC.KFC beats its competitors through the revising marketing strategy at every movement but the main competitor of KFC are McDonald.

Strengths and weakness of competitor:trengths: 38 products, Attractive Marketing, Budget, More entertainment for kids

Outlets,

Huge

W eaknesses: Same type of Menu, No Home Delivery


Environmental factors and opportunities
Political :
The operations of KFC are affected by the government policies on the regulations of fast food operation. Currently government are controlling the marketing of fast food restaurant because of health concern such as cardiovascular and cholesterol issue and obesity among the young and children in the country. Governments also control the license given for open the fast food restaurant and other business regulation need to follow such asfor a franchise business. Good relationship with government in giving mutual benefits such as employment and tax is a must for the company to succeed in any foreign market.

Economic:
Though for last 1 year their was economic slowdown all across the globe but the sales of KFC and other fast food chains did not slow down to that extent that of other sectors in. The GDP (Purchasing Power Parity) is estimated at 2.965 trillion U.S. dollars in the year 2010. The GDP- per Capita (PPP) was 2700 U.S. dollars as estimated in 2008. The GDPreal growth rate in 2007 was 8.7%. India has the third highest GDP in terms of purchasing power parity just ahead Japan and behind U.S. and China. Foreign direct investment rose in the fiscal year ended March 31 2007 to about $16 billion from just $5.5 billion a year earlier. There is a continuous growth in per capita income; Indias per capita income is expected to reach 1000 dollars by the end of 2007-08 from 797 dollars in 2006-07. This will lead to higher buying power in the Hands of the Indian consumers. So taking into considerations the economic factors of India KFC is safe. The only danger to it will be if there is a terrorist attack in India and the victim is KFC.
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Socio cultural:
India is the second most populous nation in the world with an approximate population of over 1.1billion people. This population is divided in the following age structure: 0-14 years 31.8%, 15-64 years 63.1% and 65 years and above 5.1%.There has also been a continuous increase in the consumption of fast food inIndia. The social trend toward fast good consumption is changing and India has seen an increase of 90% fast food consumption from the year 2002-2007. This increase is far greater than the increase in the BRIC nations of Brazil (20 per cent), Russia (50 per cent) and China (almost 60 per cent).Thus this shows a positive trend for fast food industries in India.

Technological:
The Indian fast food Industry is heating up with a lot of foreign playersentering the Indian market. The technological knowhow and expertise will also enter the Indian market with an increase in competition. With the lower rates and increase technology the fast food counters are attracting youth by giving them attractive deals. For e.g. KFC and Dominos pizza. For a fast food restaurant, technology does not give a very high impact on the company and it is not a significant macro environment variables. However KFC should be looking to competitors innovation and improve itself in term of integrating technology in managing its operation. For example in inventory system, supply chain management system to manage its supply,easy payment and ordering systems for its customers and wireless internet technology. Implementation of technology can make the management more effective and cost saving in the long term. This will also make customer happy if cost savings results in price reduction or promotional campaign discount which will benefits them from time to time.

Environmental:
As one of world largest consumer of beef, potatoes and chicken, KFC always had been critics for world environmentalist. This is because high consumption of beef causing the green house effect by methane gasses coming from the cows ranch. Large-scale plantation has effect the environment and lost of green forest opening for plantation activities. Vegetarian environmentalist criticizes the fast-food giant for cruelty
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toanimals and slaughtering. In America, once KFC want to introduce whaleburger causing uproar because whales are endangered species. Before using paper packaging, KFC once had been criticized for being insensitive to pollution because of using ne based packaging for its food products. Imagine millions of people purchase from fast food operator and how is the impact to world environment by throwing away those hard to recycle packaging.Our world is getting concern on environment issue and business operating here should not just care for profit, but careful usage of world resources for sustainable development and care for environment safety and health for our future generation. Critics and concern from all public or activist should be review and support if necessary to ensure we play our social responsibility better.

Legal factors:
As a certified fast food operator, there are many regulations and procedures that KFC should follow. For example is the Halal certification that becomes a concern to Muslim consumers. KFC should protect its integrity and consumer confidence by ensuring all materials and process are as claimed or must followed.Other legal requirement that the business owner should follow as stipulated in laws are such as operating hours, business registration, tax requirement, labor and employment laws and quality & environment certification (such as ISO) in which the outlet has been certified. The legal requirement is important because the offenders will be fined or have their business prohibited from operating which can be disastrous.

Summary of current situation:SWOT analysis mean strength, weakness, opportunities and threats and the SWOT analysis of KFC are:

STRENGTHS: Goodwill and reputation: The company certainly has earned a good name and reputation by its previous products and services in the market. It is even more recognised in other markets outside India, where the company is among the leading fast food giants. The brand is recognised and trusted in India for its quality products, price, and customer service. It therefore has a good
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head start and enjoys a good chance of becoming a leader in Indian fast food industry. Employee Loyalty: Employee Loyalty is one of the major strengths of KFC. The turnover rate in the company is amongst the lowest in the industry. Customer Loyalty: Despite gain by Boston Market and Chick-fill A, KFC customer base remained loyal to the KFC brand because of its unique taste. KFC has continued to dominate the dinner and take out segment of the Industry. Ranks highest among all chicken restaurant chains for its convenience and menu variety. It generates $1B revenue each year.

WEAKNESSES: KFC was losing market share as other Chicken chain increased sales at a faster rate. KFC share of Chicken Segment sales fell from 71 percent 1999 , to less than 56 percent in 2009 , a 10 years drop of 15 percent. Huge competition in this segment. India is still mostly a vegetarian dominated cultured society. South India is especially very much so. This may reduce the market share of the company. KFC has not yet invested much on R&D, and innovating new products for Indian Markets. This may lead to failure of their products as they are not in line with the Indian mind set, peoples taste and preferences and their likes and dislikes. This may prove fatal for the company.

OPPURTUNITIES: New Markets: Globalisation has opened doors for new markets for the company. As the developed markets are mostly saturated, the developing countries like India and China promises a good market and generation of demand in the future. With more than 70% of the markets in india being unexplored and un organised, KFC has a good scope of expanding its operations in the country. Cross Culture: Generally there is a good acceptance of American culture of fast food in India. People are opening up to fast foods more regularly in their daily lives and not just keeping it a once in a month affair. Thus Indian mindset is fast changing. Large Youth population: India has a very large share of youth population a compared to other countries. More than 60% of the population is under the age of 30yrs. As the young generation are
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more open to fast foods and demand it more, this is a good news for the company. New variety: Company can also come up with new variety in the menu like Pizzas, garlic breads to attract more customers.

THREATS: Competition: Competitor companies like McDonalds are fast catching up with the market.McDonalds with sales of more than 19 billion in 1999, accounted for 15 percent of the sales of the nations top 100 restaurant chains. Organisations like PETA People for Ethnic Treatment for Animals have given a bad name to the company which may prove disastrous to the image of the firm. Currently, KFC is under massive attacks from animal organisations, questioning the way KFCs suppliers are threatening the chicken, before they got slaughtered. Anti-KFC campaigns, such as the one from PETA are affecting KFCs brand image in a negative way and result in direct dollar losses, as less people are consuming KFC chicken Saturated US Market: Now KFC cannot rely on just its home market to generate sales. As the US markets are already saturated and leave no or little scope for growth, company necessarily needs to look at offshore foreign markets to generate sales and keep up the profits.

KFC IN INDIA
Foreign fast food companies were allowed to enter India during the early 1990s, thanks to the economic liberalization policy of the Government of India (GoI). One of the first fast food multinationals to set foot in India was Kentucky Fried Chicken (KFC),owned by PepsiCo.KFC received permission to open 30 new outlets across the country. It chose Bangalore as its launch pad because the city had a substantial upper middle class population, with a trend of families eating out. Also, it was considered Indias fast growing metropolisinthe1990 . The Bangalore outlet was opened in June 1995. Apart from Bangalore, PepsiCo planned to open 60 KFC and Pizza Hut outlets in the country over the next seven years. However, KFC became embroiled in various

controversies even before it started full-fledged business in India.

CULTURAL FACTORS IN INDIA THAT GO AGAINST KFCs ORIGINAL RECIPE:


KFC is perceived as a restaurant serving only chicken-Indian families

obviously wanted more varieties. Believed to be expensive .. no value for money. Wanted to position itself as a family restaurant , not as a teenagehangout Ambience was missing. Perceived differences in eating habits. Tried to target the vegetarian segment. However this backfired as in India having veg food cooked in a non veg kitchen doesnt come out well with the vegetarian segment.

ETHICALFACTORS:
The regulatory authorities found that KFCs chicken did not adhere to the prevention of FOOD ADULTRATION ACT, 1954. Chickens contained nearly three times more monosodium glutamate (popularly known as MSG, a flavor enhancing ingredients) as followed by the act. Since the late 1990s, KFC faced severe protests by people for Ethical Treatment of Animals (PETA), an animal rights protection organization. PETA accused KFC of cruelty towards chickens and released a video tape showing the ill-treatment of birds in KFCs poultry farms.

CULTURAL FACTORS CONTRIBUTING TO KFCs SUCCESSININDIA


Reducing the psychic distance by handling over of operations to local
people so that customers could relate to them more easily. Able to adapt to cultural differences, tastes and preferences. For example keeping in mind the Indian tastes buds KFC launched afierier ZINGERBURGER. Got an edge since chicken is a staple dish and is taken more frequently
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in Asiancountries. More accustomed to take out food over the counter. The target customer of KFC [upper, middle and above] are health conscious and hence to cater to their interest Kentucky fried Chicken changed its name to KFC. Price sensitivity of the two economies drove KFC to introduce menus that were easy on the consumers pocket. In its second coming, KFC India has not only Indianised its products, but also plans to introduce a large number of items from its international menu to make its mark in the domestic quick service restaurant (QSR) market. Ever since they relaunched in 2004, the have been doing rather well. In fact, they have a full fledged strategy this time round to avoid the mistakes they committed earlier..

Suggestions: KFC has its well established market although it has to take into consideration the ethical factors in India and also it has to keep in mind the PETA guidelines.

As McDonalDs is its main competitor so it has to launch many new variety of products.

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